Breaking it down into such small bits makes it immediately obvious if I haven't understood something, because I either wouldn't understand the answer for one of my own cards, or wouldn't even know how to create an answer. If done properly, it's much harder for something to "slip through the cracks" so to speak.
When I first started properly integrating this into my day to day life I also noticed that I was interested in remembering many more mundane things than I would've expected. Simple stuff that I really didn't have a place to write them down for, but that also weren't really important enough to take time out of my day to actively memorize it. There's a place for that now. It's been really interesting to see how broadly applicable spaced repetition is and that it's not just useful to learn for college exams.
The naive approach definitely leads to rote learning of factual trivia, but proper prompts can definitely foster curiosity and understanding. In fact it's often times the process of creating new prompts that reveal a gap in my understanding.
This Article from Andy Matuschak is a very thorough introduction to the art of prompt writing: https://andymatuschak.org/prompts/
Of course it doesn't mean that practical experience is obsolete, quite the opposite. But spaced repetition works great in conjunction with practice. I'd go so far that it's more effective to do both, than just practical experience.